[G.R. No. 140518.

December 16, 2004]

MANILA DIAMOND HOTEL EMPLOYEES UNION, petitioner, vs. THE HON.
COURT OF APPEALS, THE SECRETARY OF LABOR AND EMPLOYMENT,
and THE MANILA DIAMOND HOTEL, respondents.
FACTS: the Union filed a petition for a certification election, which was
dismissed by DOLE. After a few months, however, the Union sent a
letter to the Hotel informing it of its desire to negotiate for a CBA. The
Hotel informed the Union that it cant recognize the latter as the
employees bargaining agent since its petition for certification election
had been dismissed. On that same day, the Hotel received a letter
from the Union stating that they were not giving the Hotel a notice to
bargain, but that they were merely asking for the Hotel to engage in
collective bargaining negotiations with the Union for its members only.
The Union announced that it was taking a strike vote, they filed a
notice of srike with the National Conciliation and Mediation Board
(NCMB) for the Hotels alleged refusal to bargain and for alleged acts of
unfair labor practice. The NCMB summoned both parties and held a
series of dialogues.
The Union, however, staged a strike against the Hotel. The Hotel claims
that the strike was illegal and it had to dismiss some employees for
their participation in the allegedly illegal concerted activity. The Union,
on the other hand, accused the Hotel of illegally dismissing the
workers. Then Secretary Cresenciano B. Trajano assumed jurisdiction
over the labor dispute. He issued an Order directing the striking
employees to return to work.
The members reported for work the next day. However, the Hotel
refused to accept them, then Acting Secretary of Labor Jose M. Espaol
issued the disputed Order, modifying the earlier one issued by
Secretary Trajano. Instead of an actual return to work, Acting
Secretary Espaol directed that the strikers be reinstated only
in the payroll.
The union moved to reconsider - denied. CA affirmed.
ISSUE: Does the Secretary of Labors order of mere payroll
reinstatements constitute abuse of discretion amounting to lack or
excess of jurisdiction?
HELD: Yes. The CA anchored its decision in the case of UST vs NLCR
wherein the Secretary assumed jurisdiction over the labor dispute
between striking teachers and the university. He ordered the striking
teachers to return to work and the university to accept them under the

same terms and conditions, but in a subsequent order, the NLRC

provided payroll reinstatement for the striking teachers as an
alternative remedy to actual reinstatement. However the ruling in the
said case was made in light of the fact that the teachers could not be
given back their academic assignments since the order was done in
the middle of the semester, making a situation where the striking
teachers were entitled to a return to work order, but the university
could not immediately reinstate them since it would be impracticable
and detrimental to the students to change teachers at that point in
time.
IN THE PRESENT CASE, however, there is no showing that the facts
called for payroll reinstatement as an alternative remedy. A strained
relationship between the striking employees and management is no
reason for payroll reinstatement in lieu of actual reinstatement.
As a general rule, the State encourages an environment wherein
employers and employees themselves must deal with their problems in
a manner that mutually suits them best. Article 263, paragraph (g) of
the Labor Code, which allows the Secretary of Labor to assume
jurisdiction over a labor dispute involving an industry indispensable to
the national interest, provides an exception:
(g) When, in his opinion, there exists a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the national
interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the
Commission for compulsory arbitration. Such assumption or
certification shall have the effect of automatically enjoining the
intended or impending strike or lockout as specified in the assumption
or certification order. If one has already taken place at the time of
assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately
resume operations and readmit all workers under the same terms and
conditions prevailing before the strike or lockout.